Birmingham Mayor Accused of Trading County Deals for Cash and Clothes

[Jacuma]

BIRMINGHAM, Ala. — The mayor of this city, Larry P. Langford, was
arrested by federal agents Monday and charged with taking bribes in
exchange for doling out county financial business to a favored firm when
he led the Jefferson County Commission from 2002 to 2006.

Mr. Langford, 60, was charged in the 101-count indictment with taking
over $230,000 in cash, clothing and jewelry in exchange for ensuring
that a widely known Alabama investment banker, William B. Blount, took
part in lucrative bond deals related to the financing of improvements to
Jefferson County’s failing sewer system. Those deals have led the
county, which includes Birmingham, to the brink of bankruptcy.

Mr. Langford, as president of the County Commission, was in a position
to insist that Mr. Blount be included in the complex financing handled
primarily by large outside firms like JPMorgan Chase and Goldman Sachs,
federal authorities said Monday in announcing the indictment. From 2003
to 2006, Mr. Blount and his company received over $7.1 million in fees,
said the United States attorney here, Alice Martin.

Mr. Blount and Albert W. LaPierre, a widely known Democratic Party
activist and lobbyist whom Ms. Martin described as an “intermediary,”
were also arrested Monday and charged in the indictment. The charges
included conspiracy, bribery, fraud and money laundering.

“Langford steered lucrative business to William Blount and his company,”
Ms. Martin said at a news conference, “and with the help of lobbyist
Albert LaPierre, they ensured that Larry Langford’s crushing personal
debts were paid off, through payoffs of loans, store charge accounts,
purchases of jewelry and clothing and other items of value.”

She called the arrangement a “pay-to-play scheme” and described how the
authorities believed it worked: “Blount would pay Langford to get county
business, and LaPierre acted as an intermediary to facilitate the
delivery of bribes or the payment of Langford’s bills to various
creditors. The co-conspirators simply paid his bills for expensive
clothing and jewelry at New York City boutiques and at specialty stores
in the Birmingham area.”

Mr. Langford, Mr. LaPierre and Mr. Blount pleaded not guilty in federal
court here Monday, and were freed on bond. Mr. Langford has previously
said the investigation of him was politically motivated. Mr. Blount is a
former state Democratic Party chairman, and Mr. LaPierre is a former
executive director of the party in Alabama. Mr. Langford is also a
Democrat. Ms. Martin was appointed by President Bush.

In his decades in the public eye here, Mr. Langford has steadily built
an image as a flamboyant, high-rolling political figure with a penchant
for expensive clothing, and Monday’s indictment only filled out that
portrait. In his first year as mayor, he has proposed a $500 million
domed stadium, made an unlikely push to host the Olympics and dressed
himself in sackcloth for a mass repentance rally at a city auditorium.

Page after page of the indictment chronicles luxury shopping the
authorities say benefited the mayor: a $12,015 watch at Tourneau in New
York on Nov. 9, 2004, paid for by Mr. Blount; $895 at Salvatore
Ferragamo two days earlier, also paid by Mr. Blount; $4,250 at one of
the mayor’s favorite stores, Remon’s in Birmingham, on Oct. 13, 2004;
and many more such transactions, particularly at Remon’s.

Mr. Langford, meanwhile, was shepherding the complicated bond deals and
interest-rate swaps that were supposed to reduce costs for his county,
but have wound up leaving it with more than $3.2 billion in debt on its
sewer system and facing what could be the nation’s largest municipal
bankruptcy. With millions in payments due, local politicians are sharply
divided over whether to file for bankruptcy.

Mr. Blount was at the center of the shopping-financing nexus laid out in
the indictment, with a clothing purchase or loan to Mr. Langford
occurring soon after or before the bond deals. On July 1, 2003, for
instance, Mr. Langford and the County Commission approved an
interest-rate swap with J.P. Morgan Securities and Bank of America for
$1.1 billion, according to the indictment; three weeks later, in New
York, Mr. Blount paid $2,850 to a luxury store for clothing for Mr.
Langford; and on July 28 Mr. Blount and his companies got $2.6 million
from JPMorgan Chase.

“Langford used his position to make it a condition that those financial
institutions include Blount Parrish in those deals, and paid Blount
Parrish a fee in order to get the county financing business,” Ms. Martin
said at the news conference, referring to Mr. Blount’s investment
banking firm in Montgomery, Ala. Ms. Martin said Mr. Blount’s firm had
not been used by Jefferson County in financial matters before Mr.
Langford became president of the County Commission.

Mr. Langford was arrested Monday morning at his office at Birmingham
Budweiser, where he is a spokesman. Outside the courthouse, his lawyer,
Thomas E. Baddley, said: “Someone innocent today has been charged. I am
surprised and disappointed. First off, Mayor Langford took a polygraph
test some time ago, and he passed that with flying colors.”

Mr. Baddley added: “He was put in shackles, and here we stand today.
It’s a terrible thing.”

The three men faced similar accusations in a civil suit filed by the
Securities and Exchange Commission last spring, in which Mr. Blount was
accused of secretly giving the mayor tens of thousands of dollars while
he secured lucrative fees for Mr. Blount’s firm.

Kyle Whitmire reported from Birmingham, and Adam Nossiter from New
Orleans.